Goldman Sachs to shut global proprietary trading unit

17 February 2011

Goldman Sachs is to close it global proprietary trading team to comply with incoming financial regulations.

According to news reports, which cited unnamed persons familiar with the matter as sources, the investment bank is to shut its Global Macro Proprietary Trading within the next few days.

The desk, which trades in fixed-income markets, stocks and currencies, is closing due to the introduction of the Dodd-Frank act last year, new regulation is looking to reduce the amount of risk large banks are exposed to by preventing them investing with their own capital.

Many of the eight traders on the desk are expected to leave Goldman to seek opportunities elsewhere rather than remain with the bank, the sources claimed.

Christopher Wheeler, an analyst at Mediobanca SpA, told Bloomberg: “Keeping the prop business going will have little benefit and closing it will be seen as a positive move to comply with Dodd-Frank.”

The closure follows the winding down of the Goldman Sachs Principal Strategies desk during August of last year.

Morgan Sze, the former head of the Principal Strategies unit, left Goldman Sachs to launch his own hedge fund at the end of 2010.

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